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Is supply chain management strategic or tactical? Are the best supply chains collaborative? Should the goal be an integrated supply chain or an integrative supply chain? The answers are a mixed bag, according to this month’s contributors.

History is a poor predictor of future sales in today's fast-moving world. Yet many companies still rely on traditional demand planning systems such as time-series analysis to create forecasts. Learn how new demand sensing technology is helping companies capture and analyze the abundance of real-time data in the digital supply chain.

Latest Slump in PMI May Have Impact on Manufacturer’s Supply Chains

Modest gains can resume after the adjustment period, but it looks like a long, cool summer in the manufacturing sector

By Patrick Burnson

June 4, 2013

When the ISM reading of 49.0 is combined with a purchasing managers’ manufacturing index (PMI) score of 52.3, the net is so close to neutral to not call it flat, observe economists.

“That is clearly superior to outright, and persistent, declines in Europe and China, but is a clear downshifting from far more robustness in late 2012 and early 2013,” said IHS Global Insight U.S. economist Michael Montgomery. “Becalmed still beats sinking.”

According to Montgomery, more tepid scores oscillating around 50 loom on the horizon through summer as the goods side of the ledger adjusts to ongoing malaise in Europe, and twin fiscal drags of tax hikes and sequester spending cuts weigh on demand for hard goods.

“Modest gains can resume after the adjustment period, but it looks like a long, cool summer in the manufacturing sector,” he added.

The manufacturing sector turned mildly negative in May, with the ISM-manufacturing index cooling to 49.0 from 50.7, its first sub-50 score of 2013 and its worst showing since June 2009. New orders and production triggered both the drop versus April and the sub-50 reading at 48.8 and 48.6, respectively. Few scores beat 50.

Prices scored a 49.5 for the first sub-50 reading since last July; oil prices probably pushed both the May 2013 and July 2012 readings below water, but other traded commodities are under downward pressure from softness in China and Europe.

About the Author

Patrick Burnson

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

The best supply chains are more than a collection of technologies and processes. As supply chain evolves from tactical to strategic, they enable a company’s go-to-market strategy and competitive position.